Lebanon on path towards change and out of financial crisis

Lebanon on path towards change and out of financial crisis

May 04, 2020

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After the resurgence of protests and unrest in Lebanon, Lebanese Prime Minister Hassan Diab has announced the approval of a new plan to overcome the financial crisis by the country’s cabinet.

Protests over rising livelihoods, economic problems and the devaluation of the Lebanese lira against the US dollar. Following the events, Lebanese Prime Minister Saad al-Hariri resigned, although the reason for Hariri’s resignation could be attributed as his efforts to disarm and continue the unrest in Lebanon because he has the history to do so.

After Saad al-Hariri, Hassan Diab won a vote of confidence in the Lebanese parliament and was appointed to form the cabinet by Lebanese President Michel Aoun. Hassan Diab, a former Minister of Higher Education and Training in Najib Mikati’s cabinet between 2011 and 2014, became Lebanon’s prime minister at a time when the country was embroiled in a series of financial and economic crises.

In the past three months, the new Lebanese government in the leadership of Hassan Diab tried hard to rescuing Lebanon from the crises it is facing in order to regain domestic and foreign trust.

In response to his promise to save the country from the crisis, Hassan Diab and his cabinet approved a plan yesterday, also known as financial reform. The plan includes six important and key clauses (financial, banking, cash, social and developmental support).

According to the Lebanese Prime Minister, his cabinet to prepare this plan has consulted with a number of groups in the past 24 days, including economic and financial experts, unions and representatives of various economic, industrial and academic sectors.

The new economic reform plan came into force with immediate effect and will be implemented over the next five years.

The plan seeks to reduce the budget deficit in Lebanon to less than six percent (5.6 percent). The first level of the plan is in connection with Beirut’s request for loans and financial assistance from international monetary institutions.

In a statement, Diab stressed that in the future, Lebanon will ask for $ 10 billion in financial assistance from the International Monetary Fund, and this amount is in addition to the amount of money that countries present at the Paris Summit in early 2020 promised to help Lebanon.

The next step in the plan is to structure independent debt, which seeks to reduce public debt to less than 100 percent of GDP. Lebanon’s debt is currently $ 92 billion, which is more than 170 percent of its gross domestic product.

The Lebanese government is seeking to rebuild the country’s economy by rebuilding the banking and financial sectors to create good and sustainable job opportunities and to set up very reliable economic sectors.

The Lebanese prime minister said his government is working to make major reforms in the electricity sector, the annual system of workers and employees, and to compensate for layoffs and fair and progressive taxes that do not affect work and production.

Diab emphasizes that he will return the looted property from Lebanon to the treasury, and that this will be one of the main tasks of his government.

The Lebanese government has also approved 14 draft and three projects in a few days, and is expected to approve eight more projects within a specified period.

“Democratic expression is one thing and an attack on security forces, the army and public property is another matter,” he said in response to developments in Tripoli, where some protesters set fire to or destroyed a number of banks and financial institutions.

Now, it remains to be seen how much Diab will be able to reduce the protests by presenting his new economic plan, and whether he will be on the way out of the crisis by presenting this Lebanese plan?

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